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Australia stuck in the middle

By Peter McMahon - posted Monday, 12 April 2010


The thing most likely to change this scenario is political upheaval in China. The US has its own problems with a growing gulf between the progressive and conservative parts of the nation, otherwise known as the red-blue divide, or coasts versus middle divide, but this is unlikely to actually tear it apart within the next decade or so. China, on the other hand, faces huge problems from environmental (including a critical water shortage) to political. China currently experiences about 100,000 demonstrations a year and spends more on internal security than it does on external. If growth rates drop much below current levels and unemployment rises, the ruling Communist Party will almost certainly face a challenge to its power.

There have been maybe a dozen challenges to the prevailing global power structure over the last five centuries and none have been resolved without warfare. Even the Soviet challenge to US power resulted in 40 years of Cold War and proxy hot wars in places like Korea, Vietnam and Afghanistan; and the USSR never challenged the US in the way China does. Furthermore, given the reality of a global economy, even the serious threat of war let alone actual fighting would hammer global markets. So this needs to be the first such transition without fighting.

Given this fraught scenario, what does Australia do? We have been the beneficiaries of the American era with peace, low energy prices and cheap money, and now we take all that for granted. We relied on the American nuclear umbrella and our security has never been seriously challenged since World War II. The Indonesians have never had the military capacity, and just as the Soviets looked like they were putting together a blue water navy, they went bust. The price for this situation has been sending a few Australian troops off to Vietnam, Iraq or Afghanistan, but overall it has been cheap.

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The difficulty with dealing with a few boats of refugees shows how hard it is to defend this country. And we now have some very expensive assets offshore - like oil rigs - to defend as well.

If the US is weakening while China is growing stronger and getting more assertive, do we switch sides and accept Chinese influence? But who knows what a Chinese new order would be like.

One thing is for sure - the dreams of an endless boom-time, of multimillions of people and of vast cities that so excite politicians and businessmen, will not eventuate. The next few decades will be very rocky as the economy staggers along, limits to Chinese growth kick in and the world governance system suffers growing strain. And then the need to attend to the climate crisis and the energy crunch will play their part as well.

Australia has a lot of real advantages - a well educated population, mature institutional arrangements, and of course great wealth, but the options are about get a good deal harder than some people think. It may well be time to start building some resilience into our economy - after all, we have the cash right now - instead of just relying on largesse from overseas.

The solution for us lies in developing a more diversified and resilient national economy, which would fit in well with measures to deal with the carbon and energy challenges. The other thing we must do is support a new global order to minimise the effects of any power shift between the superpowers, which is also needed to deal with the global carbon/energy issue.

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About the Author

Dr Peter McMahon has worked in a number of jobs including in politics at local, state and federal level. He has also taught Australian studies, politics and political economy at university level, and until recently he taught sustainable development at Murdoch University. He has been published in various newspapers, journals and magazines in Australia and has written a short history of economic development and sustainability in Western Australia. His book Global Control: Information Technology and Globalisation was published in the UK in 2002. He is now an independent researcher and writer on issues related to global change.

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